market may enable the firm to increase its output and slide more rapidly on the learning curve.
Increased production for the international market can also help reduce the cost of production for
domestic sales. [ CITATION Mic13 \l 17417 ]
On the other hand, in reaction to competitive pressures, a firm may fear losing domestic
market share to competing firms or losing foreign markets permanently to new competitors.
Overproduction is a major reactive motivation. Historically, during downturns in the domestic
business cycle, markets abroad provided an ideal outlet for high inventories. Such market
expansion often does not represent commitment by management but rather a temporary safety
valve activity. Instead of developing an international marketing perspective by adjusting the
marketing mix to needs abroad, firms stimulate export sales with short-term price cuts. Second,
stable or declining domestic sales, whether measured in sales volume or market share, also
stimulate firms to expand internationally. Products marketed by the firm domestically may be in
the declining stage of the product life cycle; thus, the firm may opt to prolong the life of the
product by expanding the market. Third, excess capacity can be a powerful motivation. If
equipment is not fully utilized, international expansion can help achieve broader distribution of
fixed costs. Alternatively, if all fixed costs are assigned to domestic production, the firm can